Solar Panel Prices Are Rising for the First Time in Years

For the first time in a long time, the cost of solar panels is on the rise. So, what’s behind this trend — and what does it mean for the consumer

The short answer: supply chains. Around 80% of the world’s solar panels are manufactured in China, and nearly half of the critical raw material polysilicon also comes from there. That makes global solar prices highly sensitive to China’s political, economic, and manufacturing landscape, as well as worldwide supply and demand.

Over the past year, a mix of pressures has created the “perfect storm” for solar panel costs.

Rising Raw Material Costs

Solar panels also rely on copper, iron, and silver — all of which are resource-intensive to mine and refine. Since extraction depends heavily on oil, higher oil prices have driven up the cost of these materials, further pushing up solar manufacturing expenses.

Shipping Costs Skyrocketing

Logistics have added another layer of cost. Before the pandemic, shipping a container of solar products from Shanghai to Australia cost around $1,800. Today, it’s closer to $9,000 or more.

Shipping now makes up about 10% of a panel’s price, compared with just 3% in 2019. Why? As Europe and the US bounce back from COVID slowdowns, they’ve driven demand for Chinese exports, diverting much of the available shipping capacity.

The Australia–China trade dispute has made things worse. With tariffs on Australian exports like coal, beef, wine, and barley, fewer goods are moving back to China — making the route less attractive for shipping companies.

China’s Energy Crunch

Recently, China’s central government has ordered coal to be prioritised for electricity generation, forcing factories — including solar manufacturers — to slow production to conserve energy.

It’s still unclear how much this will affect solar panel exports to Australia, but it could create short-term supply disruptions.

Government Action: Restructuring the Solar Sector

In early July, President Xi Jinping chaired a high-level meeting of the Central Financial and Economic Affairs Commission to address the deepening crisis. Days later, the Ministry of Industry and Information Technology (MIIT) called a closed-door meeting with the country’s largest solar companies to begin coordinating a sector-wide restructuring.

Core Elements of China’s Solar Market Recalibration:

• Proposed Removal of Export Rebates:The 9% VAT export rebate is on the chopping block, raising export costs and potentially curbing dumping practices.
• Imposition of Minimum Pricing Rules:Regulators may implement price floors based on verified production costs to prevent below-cost sales and restore sustainable margins.
• State-Led Industry Consolidation:Mergers, acquisitions, and factory closures are expected, with the government offering regulatory and financial support to streamline the sector.
• Capacity Quotas for Key Inputs:Quotas on materials such as polysilicon, wafers, and glass aim to tackle overproduction at its source and stabilise the supply chain from the bottom up.

China’s Renewable Energy Push

Energy security is a top priority for Beijing. The government has pledged to reach carbon neutrality by 2060 and aims to generate 45% of its energy from renewables.

Solar will play a huge role in this transition, and China’s domestic demand for panels is growing rapidly. That means a larger share of China’s solar panel output may stay within the country — further tightening supply for international buyers.

👉 The bottom line: A mix of raw material shortages, shipping disruptions, rising costs, and China’s Export rebate and its own clean-energy push are all driving solar panel prices higher. If you’re considering solar, it may be worth acting sooner rather than later to lock in pricing before further increases take hold.